Fixing up abandoned buildings for low-income families takes money, time and experience. Even an organization that has all those things can find the process of dotting each bureaucratic "i" a backbreaking, budget-busting task, as housing activist Alice Vetter discovered.

Vetter is executive director of Ministries United to Support Community Life Endeavors (MUSCLE), a nonprofit organization that advises tenants on buying their buildings.

Two years ago, MUSCLE decided to become a developer. It signed a contract to buy a boarded-up 20-unit building at 1106 Columbia Rd. NW with plans to renovate it and turn it into a cooperative for low-income families. Vetter assumed that the building would be ready to open during the spring or summer of 1987. It was not to be.

Instead, the building stood idle for 18 months while MUSCLE's staff fought red tape and other problems with the city's Department of Housing and Community Development, which was providing loans and subsidies; a private lender, and the organization's insurance agent, all of whom had to be satisfied before carpenters could drive the first nail in the building.

Construction on the building began in July. The prospective residents, who made down payments of $700 months ago, will probably not be able to move in until next summer.

MUSCLE's odyssey gives insight into why, in a city where thousands of families are sharing crowded quarters with relatives because they cannot find a place to live, more than 5,000 apartments are abandoned.

"Developing affordable housing is really hard," Vetter said. "The buildings we have to draw on for our stock are the ones nobody else wants to touch. Whether {the building} is burdened with liens or the bank's holding a note that might be foreclosed . . . no private developer in his right mind would touch it."

Among those anxiously watching the renovation are Ronald and Antoinette Lee, who live near the Columbia Road building. They are among those who made down payments.

"We were wondering what was taking so long," Ronald Lee said. "A lot of times we wanted to just drop out, but we were looking toward the long run. We wouldn't find anything better than what they were offering."

The delays on MUSCLE's project were not because of bureaucratic insensitivity or unwillingness of private lenders to lend money in a run-down neighborhood, but because of what Vetter called "the nature of the beast."

Bill Hobbs, chief of the multifamily division of the city housing department, which administers the loan program that MUSCLE planned to use, acknowledged that the city moves slowly. He pointed out that the city has one of the best records in the country for spending the money made available to it by the U.S. Department of Housing and Urban Development.

"It's Catch-22," Hobbs said. "It's government money, and how you spend it is supposed to be above reproach. You're not supposed to cut any quick deals. You're not supposed to pay for any work that wasn't done 100 percent correctly. But everyone also complains about how long it takes."

Even though abandoned buildings can be had for a song, fixing them up is not cheap. MUSCLE bought the building for $80,000; the staff estimated that it would cost $1.1 million to make a modest walkup building livable for 20 families.

Once MUSCLE purchased the building in January 1986, it applied for a city loan to renovate the structure and to subsidize rents for low-income residents. It received tentative approval in May 1986 from the D.C. housing department for a complicated loan package including a $100,000 grant for construction and subsidies for the tenants.

The Aetna Life and Casualty Co. of Hartford, Conn., promised MUSCLE a $455,000 construction loan, and another nonprofit organization promised the remainder of the $1.1 million. Vetter and her staff assumed that construction would start last summer.

It was not to be. Five months went by before the letter from the city housing department announcing the loan arrived at MUSCLE's office in October. In the meantime, the nonprofit organization that was providing half the construction money wanted out of the deal.

"It certainly has been a frustrating experience," sighed David Wiley, MUSCLE's deputy director.

In an episode reminiscent of "The Perils of Pauline," MUSCLE was snatched from the path of financial disaster by by American Security and Trust Bank, which offered to provide the money for the construction loan.

But more trouble was ahead. The housing department letter included loan conditions with which MUSCLE staff members believed they could not comply. The condition that caused MUSCLE the most anguish required that the project be put out for bid. The organization had established a working relationship with a contractor through its referral work and wanted that contractor to do the Columbia Road project.

In the construction business, delays cost money. Construction costs had gone up $200,000. At that point, MUSCLE was on the verge of giving up on its plans and was considering renovating the apartments at "market rate" monthly rents of $600 to $700.

Vetter said last November, "I'm beginning to think that {fixing up abandoned buildings} is a real dumb thing to do."

Rather than drop the plan altogether, Vetter and her staff decided to ask the city housing agency to drop the conditions attached to the loan and give MUSCLE more money. Because the construction figures had changed, the city required MUSCLE to file a new application.

"This wouldn't happen to anyone who was sane," Vetter joked. "It's just been a comedy of errors."

In January, the housing department came through with more money, and dropped some requirements for the project. MUSCLE was once more ready to go. Suddenly it appeared that American Security and Trust, which had given its tentative approval to the project nearly a year earlier, was taking its time.

The delays were unrelated to the project. First the bank attorney drafting the letter was on vacation. Then she had to take it before a senior loan committee. A couple of months slipped by while MUSCLE's staff members held their breaths hoping the project's cost would not rise again.

Finally, the letter from the bank arrived. Everything was fine, but a technicality involving bonding had forced the contractor to delay construction.

Construction began on July 9. MUSCLE is also putting together a financing package for the 20-unit apartment building at 1108 Columbia Rd.

"I think a big lesson we learned is how long it takes," Wiley said.